If your creditor or collector has agreed to go in for debt settlement, this means that they are willing to write off a substantial part of your debt. Once they have agreed to do so, it is time to do some serious debt settlement negotiation. This means that you have will have to sit and negotiate with your creditor regarding how much is to be written off and what amount you can pay off. In these things, it is best to be practical and honest with your creditor. Once you have agreed to a settlement, you will have to make these monthly payments or else the whole plan could be called off by them. Here are some of the basic steps to the process of negotiation.
Step 1: how much can you pay?
The first step has to be taken by you. Look at your monthly income, and your expenses and determine how much money you can realistically offer to your creditors. How much money can you pay as a monthly payment? Never offer more than what you can, in a bid to get rid of the debt as early as possible. Also, once you start a negotiation, don’t offer up information about your work, employers, and banking accounts and so on. Also, once you start a negotiation, don’t offer up information about your work, employers, and bank accounts and so on.
Step 2: Ask that your records be cleaned.
The next step is to as your collectors to erase any negative reports from your credit reports which were added on after your account was given to them. Remember that they can only remove the information that was added after your account came to them. They cannot erase the data that was already there on your credit report earlier. Check your credit report once it is done to make sure that they have kept their word.
Step 3: Get the deal in print
No deal is valid until it has been put down on paper and authorised by the involved parties. As soon as the collector has agreed to a debt settlement negotiation, put the deal in writing before you give them any of your money. In fact, it is a good idea to hire an attorney who can review the deal for any hidden clauses or veiled jargon that you skipped over. This should obviously be done before the money has exchanged hands.
What should the deal say?
The agreement that you entered into with the collector should cover some of the basic points like.
Firstly, all the details about the money should be clearly mentioned. How much are you paying, whether it is to be paid in a lump sum or monthly payments and so on.
The due dates for the monthly payments or the lump sum payments should also be mentioned.
Thirdly, the method of payment should be clearly specified. Will you make an electronic bank transfer or a cashier’s check? It is best to avoid paying your debt collectors with a personal check.
The agreement should contain the clause that the collectors will officially report to the credit bureaus about when your debt has been cleared in full immediately after they have received your settlement money.
Lastly, the deal should clearly lay out the consequences in case it is breached and what are the conditions that can result in said breach of the contract.
Always remember that it is the fine print that often gets you. Do not sign the settlement negotiations until you are absolutely clear about all the terms and conditions of the contract. If you think you cannot negotiate, then you can hire a debt settlement company to do it.
About the author
Jon has been working in a debt settlement firm for the past five years. He has made debt settlement negotiations for countless clients on their behalf. As a hobby, Jon loves to read books and go on long walks with his dog.